Glanbia may tweak its peak supply management proposals

Glanbia Ireland representatives have held meetings with the organisation’s 11 regional committees over the past seven days in order to gauge reaction to its peak supply management proposals.

Additional meetings have also been held with a range of stakeholder organisations, including Teagasc and the farm organisations.

A Glanbia spokesperson has confirmed to Agriland that the board of the co-op will meet over the coming days to reflect on grassroots opinions and the views expressed by all other relevant organisations.

This may well lead to some changes being made to the package of measures currently on the table.

Retirement scheme

Commenting specifically on the retirement scheme being offered, the spokesperson confirmed that all agreements entered into between Glanbia Ireland and individual suppliers will be legally binding.

“All Glanbia suppliers have received a letter from the chairman plus information leaflets, outlining the details of the new milk supply arrangements and the retirement scheme,” the spokesperson told Agriland.

Subsequent to this, each supplier will receive a further communication detailing how they will be impacted by the new peak supply arrangements.

“The retirement scheme is completely voluntary and is open to all milk suppliers. Application forms will be distributed in the coming weeks.”

Glanbia Ireland is offering the voluntary milk production retirement scheme to suppliers who may be evaluating their future options.

The measure offers a farmer a once-off opportunity to exit from milk production with a monthly retirement income for the next five years.

It will allow diversification into other on-farm activity – such as beef, tillage and heifer-rearing.

The leasing of part or all the farm, other than the milking facility, will be permitted.

Funding the retirement scheme

In addition, the initiative will establish peak processing headroom for remaining suppliers who are contributing to the funding of the retirement scheme.

Applications will open in April with July 31 set as the closing date. Those accepted for the scheme will be expected to stop milking by January 1, 2022

The retirement payment will be based on milk volume supplies in 2020 and calculated on the basis of 4cpl for volumes <100,000L; 3cpl for volumes 100,001 – 200,000L and 2cpl for volumes >200,000L.

The maximum payment on offer is €15,000 per year, equating to €75,000 over five years.

Suppliers need to be in milk production in 2021 (supplying volumes broadly similar to previous years) and have had a Milk Supply Agreement with Glanbia Ireland or with a corporate shareholder supplier for the previous five years.

In exchange for the retirement payment, the supplier must agree to cease milking cows on the farm holding for a duration of six years – to December 2027, regardless of whether it is the retired farmer or family members.

The retirement payment will be made by Glanbia to the retired farmer on a monthly basis for a duration of five years (January 2022 to December 2026).